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What effect would a market crash have on real estate agents?

Real Estate Agent from Washington, MI

posted over 1 year ago

I am currently taking online classes to get my real estate license and plan to jump into real estate as soon as possible after I finish college or maybe even while I'm still in college. Anyways my goal is to become an agent and work as hard as I need too to be a successful agent my first few years and not have to get a job working somewhere. I'm worried that sense the market has been so good for some time now that I might get into real estate when this trend has ended and the market is crashing again. If that does happen to be the case I know home values will fall but what will be the effect on selling homes? Will most people try and wait It out or are many people forced to sell because they can no longer afford to live in their house?

Real Estate Agent from Riverside, Illinois

replied over 1 year ago

@Nickolas Rossol I hate to break it to you, but you will probably want to be doing something else to help put food on the table while you start your realtor business. Most conventional wisdom is that you should have 6 months to a year of income saved up before you start, and even this might not be enough as it takes a while to get your business going as a realtor.

As for how the market correction will affect agents, I personally am not that concerned. I don't thing the same types of issues are in place with lending this time around. As long as this is more of a "correction" and not a crash, I think people will still be buying and selling.

Residential Real Estate Agent from Rockville, MD

replied over 1 year ago

During economic booms there is an influx of people into the profession, and during recessions the number of agents shrink as the number of transactions shrink. For a full time productive agent, it doesnt really matter, and can actually be good during recessions as average commissions tend to rise as the part timers who dont know what they are doing, who undercut prices disappear.

To expand on @John Warren 's idea of having 6 months reserve...Id even add onto that....you need start up capital to be successful. People often mistake being an agent as having a job. It is not. You are running a small business...and small businesses have overhead whether money is coming in or not. I tell new agents typically to plan on spending $1,000 a month minimum if they want to be successful.

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